The Seizure Order as an Asset-Freezing Instrument
At the enforcement stage, freezing a debtor's assets means placing the debtor's claims against third parties under seizure: temporarily restricting the power to dispose of funds held in a bank, a salary, property to be returned by an assigned person, or other claims. The Georgian Law on Enforcement Proceedings regulates this mechanism through the order on placing a seizure, and it is precisely this order that is the creditor's principal instrument for seizing claims within the framework of an enforceable assignment.
Issue and Content of the Order
Under Article 56 of the Law, where a seizure must be placed on a claim, the National Enforcement Bureau issues, on the basis of the creditor's application, an order on placing a seizure on it. The order must indicate the basis of the creditor's claim, the claims to be performed, and the person against whom the debtor's claim is directed — the assigned person. Together with the seizure, an order on payment to the creditor must be issued. The order may also cover the part of the claim that becomes enforceable in the future, and a seizure on claims consisting of a salary or similar regular income extends to amounts payable after the seizure was placed — particularly important for debtors with regular sources of income.
Service and Effectiveness of the Seizure
The seizure order must be delivered to the assigned person — the person whose property of the debtor is forcibly inventoried with them — and sent to the creditor and the debtor. Upon delivery of the order to the assigned person, the seizure becomes effective within the framework of the creditor's claim: the debtor may no longer dispose of the claims, and the assigned person may no longer perform an action constituting the content of the obligation — the seized sum must be paid to the creditor. Any other action constituting the content of the obligation must be performed by the enforcement officer.
Seizure of Movables
Article 40 defines the general rule of seizure: placing a seizure on movables means inventorying the debtor's property, declaring a prohibition on disposal — alienation in any form, pledge, or lease contracts — and/or transferring the property for safekeeping. The enforcement officer records the seized items in the inventory-and-seizure act. A transaction concluded after the seizure is placed is void. The officer immediately deposits seized money into the Bureau's deposit account, while securities and valuables are kept in a specially designated, guarded room; seizure may also be effected by sealing. Any disposal of seized property by the debtor or the custodian entails liability. A seizure may not be placed earlier than one month before the harvest. If a third person asserts a right to the property, it is still entered in the act with a note, and the officer explains the right to apply to court for release of the property from seizure; where an ownership document is presented and the creditor consents, the officer may remove the property from the act.
Consequences of the Seizure and Disputes with the Assigned Person
Under Article 57, the seizure order entitles the creditor to demand of the third person the performance, for the creditor's benefit, of such action as the third person should have performed towards its debtor. The order remains in force even if it was wrongly issued in favour of the assigned person and against the debtor, until it is cancelled and the cancellation becomes known to the assigned person. The debtor must give the creditor the information needed to raise the claim and the documents existing about it. The creditor, in turn, may bring an action in court against the assigned person on the basis of the seizure order.
Article 59 regulates the case where several creditors place seizures on the same claim: where a seizure is placed on a claim multiple times, the creditors' claims are satisfied according to the order in which the seizure orders were delivered to the third assigned person, and where applications are submitted simultaneously, the creditors are satisfied proportionally to their claims. With multiple seizures, the assigned person must make payment through the National Enforcement Bureau, which distributes the withdrawn amount. The creditor may also waive claims obtained by means of the seizure order, without violating the creditor's rights given in the enforcement documents — a statement to that effect is transmitted to the Bureau and to the assigned person.
Frequently Asked Questions
Below we answer the questions most frequently asked on this topic.
Who issues the seizure order on a claim?
The National Enforcement Bureau, on the basis of the creditor's application. The order indicates the basis of the claim, the claims to be performed and the assigned person.
When does the seizure become effective?
Upon delivery of the order to the assigned person, within the framework of the creditor's claim. From that moment the debtor may not dispose of the claims and the assigned person may not perform towards the debtor; the payable sum is credited to the creditor.
Does the seizure extend to future amounts?
Yes. The order may cover the part of the claim that becomes enforceable in the future, and for a salary or similar regular income the seizure extends to amounts payable after the seizure was placed.
What happens if several creditors seize one claim?
Creditors are satisfied according to the order of delivery of the seizure orders, or proportionally upon simultaneous applications; payment is made through the Bureau.
How We Help on Legal.ge
Placing a seizure on claims requires a correctly drafted application, precise identification of the assigned person and deliberate management of the order's consequences. On Legal.ge you can consult an experienced lawyer who will help you with the process of seizing claims on enforceable grounds, relations with the assigned person and, where necessary, preparing an action in court. Submit a request on the site and get qualified assistance.